Key Takeaways
- 22 states offer full property tax exemptions for 100% disabled veterans on their primary residence, potentially saving thousands of dollars annually.
- 37 states completely exempt military retirement pay from state income tax, including nine states with no income tax at all.
- New 2025-2026 changes: California now offers up to $20,000 in retirement pay exemptions, Georgia increased exemptions to $65,000 for all ages, Vermont expanded coverage, and Kansas will begin sales tax exemptions for disabled veterans on July 1, 2026.
- All VA disability compensation is tax-free at both federal and state levels, regardless of which state you reside in.
- Exemptions vary significantly by disability rating—some states offer benefits starting at 10% disability, while others require 100% permanent and total (P&T) status.
- Surviving spouses often qualify for continued exemptions if they remain unmarried and occupy the home as their primary residence.
Table of Contents
- Understanding Veteran Tax Exemptions
- States With No Income Tax
- Military Retirement Pay: State Income Tax Treatment
- States With Full Property Tax Exemptions for 100% Disabled Veterans
- States With Partial Property Tax Exemptions
- New 2025-2026 Legislative Changes
- Complete State-by-State Breakdown
- How to Apply for Veteran Tax Exemptions
- Frequently Asked Questions
Understanding Veteran Tax Exemptions
Veteran tax exemptions represent one of the most valuable benefits available to those who have served in the U.S. Armed Forces. These exemptions can save veterans and their families thousands of dollars annually, yet many eligible individuals don’t take advantage of them simply because they’re unaware they exist.
Tax exemptions for veterans fall into several categories: federal exemptions that apply nationwide, state income tax exemptions on military retirement pay, property tax exemptions that reduce or eliminate taxes on a primary residence, and various motor vehicle and sales tax benefits. Understanding which exemptions apply to your situation requires knowing both your disability rating and the specific laws in your state of residence.
Federal Tax Exemptions (Applies in All States)
Before diving into state-specific benefits, veterans should understand what’s already tax-free at the federal level:
- VA Disability Compensation: All monthly disability payments from the Department of Veterans Affairs are completely exempt from federal income tax.
- Dependency and Indemnity Compensation (DIC): Payments to surviving spouses and dependents are tax-free.
- VA Pension Benefits: Tax-exempt at the federal level.
- GI Bill Benefits: Education benefits, including housing allowances under the Post-9/11 GI Bill, are not taxable income.
- Vocational Rehabilitation & Employment (VR&E) Allowances: Exempt from federal taxation.
- Combat-Related Special Compensation (CRSC): Tax-free compensation for combat-related disabilities.
Note that Concurrent Retirement and Disability Pay (CRDP) is generally taxable as military retirement pay, while your underlying VA disability compensation remains tax-free.
States With No Income Tax
Nine states impose no state income tax on any type of income, making military retirement pay automatically tax-free for residents:
| State | Notes |
|---|---|
| Alaska | No income tax; residents may qualify for Permanent Fund Dividend |
| Florida | No income tax; strong property tax exemptions for disabled veterans |
| Nevada | No income tax; property tax exemptions scaled by disability rating |
| New Hampshire | No income tax as of 2025 (eliminated interest/dividends tax) |
| South Dakota | No income tax; property tax exemptions for disabled veterans |
| Tennessee | No income tax (eliminated Hall Tax in 2021) |
| Texas | No income tax; full property tax exemption for 100% disabled veterans |
| Washington | No income tax; property tax exemptions based on income/disability |
| Wyoming | No income tax; $6,000 assessed value exemption for combat veterans |
Military Retirement Pay: State Income Tax Treatment
Beyond the nine states with no income tax, an additional 28 states fully exempt military retirement pay from state income taxation. This represents a significant financial benefit for military retirees, as retirement pay can be substantial after 20 or more years of service.
States That Fully Exempt Military Retirement Pay
The following states impose no state income tax on military retirement pay:
Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Utah, and Wisconsin.
States With Partial Exemptions
| State | 2025-2026 Exemption Details |
|---|---|
| California | NEW: Up to $20,000 exempt for retirees with AGI under $125,000 (single) or $250,000 (joint), effective 2025 |
| Colorado | $15,000 (under 55), $20,000 (55-64), $24,000 (65+) |
| Delaware | Up to $12,500 deductible until age 60 |
| Georgia | Up to $65,000 for retirees of any age starting 2026 (previously age-restricted) |
| Idaho | Tax-free for retirees 65+ or disabled retirees 62+ |
| Kentucky | Up to $31,110 exempt (pre-1998 retirees fully exempt) |
| Maryland | $12,500 exempt; increases to $20,000 at age 55 |
| Montana | 50% of retirement pay deductible for first 5 years for working residents |
| New Mexico | Up to $30,000 exempt |
| Oregon | Pre-October 1991 service is exempt; post-1991 is taxable |
| Vermont | NEW: Full exemption for AGI under $125,000; partial for $125,000-$175,000 |
| Virginia | $40,000 exempt in 2025 and beyond |
| West Virginia | Full exemption |
States That Tax Military Retirement Pay
As of 2025, California and Washington, D.C. are the only jurisdictions that fully tax military retirement pay as regular income, though California’s new partial exemption provides some relief for lower-income retirees.
States With Full Property Tax Exemptions for 100% Disabled Veterans
Property tax exemptions represent one of the most valuable benefits available to disabled veterans. These exemptions can save homeowners thousands of dollars annually. The following 22 states offer complete or near-complete property tax exemptions for veterans with a 100% service-connected disability rating:
| State | Exemption Details | Surviving Spouse Eligible? |
|---|---|---|
| Alabama | Full exemption on homestead (up to 160 acres) | Yes, in some cases |
| Arizona | Full exemption for 100% service-connected disability | Yes |
| Arkansas | Full exemption on homestead and personal property | Yes, if unmarried |
| Connecticut | 100% exemption on dwelling (NEW 2024) | Yes |
| Florida | Full exemption for permanent and total disability | Yes, if unmarried |
| Hawaii | Varies by county; some offer full exemption | Varies by county |
| Illinois | $250,000 EAV exemption (often eliminates all taxes) | Yes |
| Iowa | 100% homestead tax credit (up to 40 acres) | Yes |
| Louisiana | Full exemption for 100% unemployability rating | Yes |
| Maryland | Full exemption on dwelling house | Yes |
| Michigan | Full homestead exemption (no reapplication starting 2025) | Yes, if unmarried |
| Mississippi | Full exemption on homestead | Yes, if unmarried |
| Nebraska | Full exemption for 100% P&T veterans | Yes |
| New Hampshire | Full exemption for SAH/SHA adapted homes | Yes |
| New Jersey | Full exemption for 100% P&T veterans | Yes, in some cases |
| New Mexico | Full exemption for 100% P&T veterans | Yes, if unmarried |
| Oklahoma | Full fair cash value exemption | Yes |
| Pennsylvania | Full exemption if income below $114,637 (2025) | Yes |
| South Carolina | Full exemption on home and up to 5 acres + 2 vehicles | Yes |
| Texas | Full appraised value exemption | Yes, if unmarried |
| Virginia | Full exemption for 100% P&T veterans | Yes |
| Wisconsin | 100% refundable tax credit (reimburses all taxes paid) | Yes, if unmarried |
States With Partial Property Tax Exemptions
Many states offer property tax exemptions for veterans with disability ratings below 100%, or provide partial relief based on various factors. Here’s a summary of notable partial exemption programs:
| State | Disability Rating Required | Exemption Amount |
|---|---|---|
| California | 100% or IU | $180,671 (2026); $271,009 low-income |
| Colorado | 100% P&T | 50% of first $200,000 |
| D.C. | 100% or IU | $445,000 reduction (income limits apply) |
| Florida | 10%+ | $5,000 deduction for 10%+; full for 100% |
| Georgia | 100% or IU | Up to $121,812 (2025) |
| Idaho | 100% | Up to $1,500 reduction |
| Indiana | 10%+ | $24,960 for 10%+; up to $38,960 total |
| Kentucky | P&T disabled | $49,100 deduction (2025-2026) |
| Minnesota | 70%+ | $150,000 (70-99%); $300,000 (100%) |
| Montana | 100% | 50-100% rate reduction based on income |
| Nevada | 60%+ | $10,000-$20,000 based on rating |
| New Mexico | Any veteran | $10,000 standard; proportional for disabled (NEW 2026) |
| North Carolina | 100% P&T | First $45,000 exempt |
| North Dakota | 50%+ | Percentage-based reduction |
| Oregon | 40%+ | $26,303-$31,565 (increases 3% annually) |
| Utah | 10%+ | Up to $505,548 scaled by rating |
| Vermont | 50%+ | $10,000-$40,000 (varies by town) |
New 2025-2026 Legislative Changes
Several states have enacted or are implementing new veteran tax benefits. Here are the most significant changes veterans should know about:
California (Effective 2025)
California now exempts up to $20,000 of military retirement pay or survivor benefits from state income tax. This exemption applies to taxpayers with adjusted gross income up to $125,000 (single) or $250,000 (joint filers). Additionally, a bill advancing through the state legislature (SB 296) would create full property tax exemptions for certain disabled veterans starting January 1, 2026.
Georgia (Effective 2026)
Georgia has expanded its military retirement pay exemption to $65,000 for retirees of any age, effective with the 2026 tax year. Previously, this full exemption was only available to retirees 65 and older, while younger retirees had lower limits.
Vermont (Effective 2025)
Act 71, signed in June 2025, provides significant new benefits: full exemption of military retirement and survivor benefit income for taxpayers with AGI of $125,000 or less, with partial exemption for AGI between $125,000 and $175,000. The law also established a new Vermont Veteran Tax Credit for eligible veterans.
Kansas (Effective July 1, 2026)
100% service-connected disabled veterans registered in the Oklahoma Veterans Registry will be exempt from state sales tax on up to $24,000 in annual purchases, excluding tobacco, alcohol, and vehicles.
Michigan (Effective 2025)
Disabled veterans with 100% VA disability, specially adapted housing aid, or unemployability rating (and their unremarried surviving spouses) now exempt their homestead starting in 2025 without needing to reapply annually.
New Mexico (Effective 2025-2026)
New Mexico has created two new programs: a $10,000 standard veteran property tax exemption for all veterans (effective 2025), and a new Disabled Veterans Exemption allowing proportional property tax relief based on disability percentage (effective 2026).
Virginia (Effective 2025)
The military retirement subtraction increased to $40,000 for tax year 2025 and beyond. Additionally, an amendment ratified in November 2024 expanded surviving spouse property tax exemptions to include spouses of service members who died in the line of duty (not just killed in action), effective January 1, 2025.
Indiana (2025 and Beyond)
Indiana expanded its tax exemption to include Space Force retirees, as well as retired USPHS and NOAA officers. Note that Indiana has also made changes to property tax exemptions for disabled veterans—contact your county assessor for current details.
Maine (Effective 2026)
Maine’s retirement pay tax exemption has been expanded to cover Space Force members as well as USPHS and NOAA Corps officers, effective with the 2026 tax year.
Complete State-by-State Breakdown
Below is a comprehensive overview of veteran tax exemptions in each state. Note that property tax exemptions are administered locally, so benefits may vary by county. Contact your local tax assessor’s office for specific details.
Alabama
Income Tax: Military retirement pay, active duty combat pay, and Survivor Benefit Plan payments are fully exempt from state income tax.
Property Tax: Permanently and totally disabled veterans receive full exemption on homestead (up to 160 acres). Homes acquired through VA specially adapted housing grants are also exempt.
Alabama Department of Veterans Affairs
Alaska
Income Tax: No state income tax. Legal residents may qualify for the Permanent Fund Dividend.
Property Tax: Veterans with 50%+ disability receive exemption on first $150,000 of assessed value.
Alaska Office of Veterans Affairs
Arizona
Income Tax: Military retirement benefits and pensions are fully exempt.
Property Tax: 100% disabled veterans receive full exemption. Partial exemptions available for lower ratings (amounts vary by county and are adjusted annually).
Arizona Department of Veterans’ Services
Arkansas
Income Tax: Active duty pay, retired pay, and Survivor Benefit Plan payments are completely tax-free.
Property Tax: Full exemption for veterans with 100% disability, total blindness, or loss of limbs. Extends to unmarried surviving spouses.
Arkansas Department of Veterans Affairs
California
Income Tax: Up to $20,000 exempt for retirees with AGI under $125,000 (single) or $250,000 (joint). Active duty residents stationed outside California pay no state income tax.
Property Tax: Basic exemption of $180,671 for 100% disabled veterans (2026); low-income exemption of $271,009 for households earning under $81,131. SB 296 may expand benefits further.
California Department of Veterans Affairs
Colorado
Income Tax: Military retirees deduct $15,000 (under 55), $20,000 (55-64), or $24,000 (65+).
Property Tax: 100% P&T disabled veterans and surviving spouses are exempt from 50% of first $200,000 of property value.
Colorado Department of Military and Veterans Affairs
Connecticut
Income Tax: Military retirement pay and Survivor Benefit Plan payments are completely tax-free.
Property Tax: 100% P&T disabled veterans receive 100% exemption on their dwelling. Veterans with 90+ days of wartime service get a $1,000 basic exemption.
Connecticut Department of Veterans Affairs
Delaware
Income Tax: Retirees deduct up to $12,500 until age 60, then switch to standard pension exclusion.
Property Tax: Qualified veterans receive full school district property tax credit. New Castle County fully exempts 100% P&T disabled veterans.
Delaware Commission of Veterans Affairs
Florida
Income Tax: No state income tax.
Property Tax: 10%+ disabled veterans deduct $5,000 from assessed value. 100% P&T disabled veterans receive full exemption. Extends to unremarried surviving spouses.
Florida Department of Veterans’ Affairs
Georgia
Income Tax: Up to $65,000 exempt for retirees of any age starting 2026 (previously $35,000 for ages 62-64; $65,000 for 65+).
Property Tax: 100% disabled veterans exempt up to $121,812 (2025) of primary residence value.
Georgia Department of Veterans Service
Hawaii
Income Tax: Retired pay, SBP payments, and National Guard/Reserve drill pay are tax-free.
Property Tax: Varies by county. Totally disabled veterans may be exempt from all property taxes (except minimum tax) in some counties.
Hawaii Office of Veterans’ Services
Idaho
Income Tax: Tax-free for retirees 65+ or disabled retirees 62+.
Property Tax: 100% disabled veterans receive up to $1,500 reduction on primary residence. Must apply between January 1 and April 15.
Idaho Division of Veterans Services
Illinois
Income Tax: Active duty, Guard, Reserve, retired pay, and SBP payments are completely tax-free.
Property Tax: 70%+ disabled veterans exempt first $250,000 of equalized assessed value. Lower ratings receive $2,500-$5,000 deductions. Returning veterans get one-time $5,000 homestead reduction.
Illinois Department of Veterans’ Affairs
Indiana
Income Tax: Active duty and Reserve pay tax-free starting 2024. Retired pay and SBP payments tax-free.
Property Tax: 10%+ disabled wartime veterans deduct $24,960; additional $14,000 for those 62+ or totally disabled with homes under $200,000.
Indiana Department of Veterans’ Affairs
Iowa
Income Tax: Federal military retirement pay and survivor benefits are completely tax-free.
Property Tax: Veterans with 18+ months active duty deduct up to $4,000. 100% P&T disabled veterans receive full homestead tax credit.
Iowa Department of Veterans Affairs
Kansas
Income Tax: Military retirement pay is completely tax-free. 100% disabled veterans claim $2,250 personal exemption.
Property Tax: 50%+ permanently disabled veterans claim homestead refund.
Sales Tax: Starting July 1, 2026, 100% disabled veterans exempt from sales tax on up to $24,000 in annual purchases.
Kansas Commission on Veterans’ Affairs
Kentucky
Income Tax: All military pay tax-free; pre-1998 retirees fully exempt; post-1997 retirees exclude up to $31,110.
Property Tax: Homeowners 65+ or totally disabled qualify for homestead exemption ($49,100 deduction in 2025-2026).
Kentucky Department of Veterans Affairs
Louisiana
Income Tax: Federally exempt military pay and retirement benefits are tax-free. Service members stationed outside Louisiana for 120+ consecutive days deduct up to $50,000.
Property Tax: 50%+ disabled veterans receive $2,500-full exemption based on rating.
Louisiana Department of Veterans Affairs
Maine
Income Tax: Out-of-state military pay, retirement pay, and SBP payments are tax-free. Now includes Space Force, USPHS, and NOAA Corps (2026).
Property Tax: Wartime veterans 62+ or 100% disabled exempt $6,000 from home value. Paraplegic veterans with VA housing grant exempt $50,000.
Maine Bureau of Veterans’ Services
Maryland
Income Tax: Retirees subtract $12,500 ($20,000 if 55+) from retirement income.
Property Tax: 100% P&T disabled veterans or surviving spouses of KIA may exempt dwelling house from property taxes.
Maryland Department of Veterans Affairs
Massachusetts
Income Tax: U.S. military pensions are completely tax-free.
Property Tax: 10%+ disabled veterans claim $400-$1,500 exemptions. 100% disabled veterans with DV plates skip excise and sales tax on one vehicle.
Massachusetts Executive Office of Veterans Services
Michigan
Income Tax: Military retirement benefits are exempt from state income tax.
Property Tax: 100% disabled veterans (or unremarried surviving spouses) exempt their homestead without annual reapplication starting 2025.
Michigan Department of Military and Veterans Affairs
Minnesota
Income Tax: Military pay, retirement pay, and SBP payments are completely tax-free. Tax credits available for combat zone service.
Property Tax: Disabled veterans exclude $150,000 (70-99% rating) or $300,000 (100%) from home’s market value.
Motor Vehicle: Qualifying veterans eligible for registration and sales tax exemptions.
Minnesota Department of Veterans Affairs
Mississippi
Income Tax: Military retired pay and SBP payments are completely tax-free.
Property Tax: Totally disabled veterans (or unremarried surviving spouses) exempt from all homestead property taxes.
Mississippi Veterans Affairs Board
Missouri
Income Tax: Active duty and National Guard/Reserve income tax-free (as of 2024). Military retirement pensions fully deductible.
Property Tax: Former POWs with total disability exempt all homestead taxes. Disabled veterans and seniors claim credit up to $1,100.
Montana
Income Tax: Active duty and Reserve/Guard pay tax-free. Residents who work in Montana may deduct 50% of retirement pay for five years.
Property Tax: 100% disabled veterans (or unremarried surviving spouses) reduce home’s tax rate by 50-100% based on income.
Montana Veterans Affairs Division
Nebraska
Income Tax: Military retirement benefits are fully excluded from taxable income (starting 2022).
Property Tax: Totally disabled veterans from service-connected causes, those with VA-funded homes, or surviving spouses qualify for homestead exemption.
Nebraska Department of Veterans’ Affairs
Nevada
Income Tax: No state income tax.
Property Tax: Veterans exempt first $2,000 assessed value. Disabled veterans exempt $10,000 (60-79%), $15,000 (80-99%), or $20,000 (100%) of assessed value.
Nevada Department of Veterans Services
New Hampshire
Income Tax: No income tax (interest/dividends tax eliminated in 2025).
Property Tax: Veterans with SAH/SHA adapted homes fully exempt. Wartime veterans with 90+ days service receive $51-$750 credits (varies by municipality).
New Hampshire State Veterans Council
New Jersey
Income Tax: Military pensions, survivor benefits, and combat pay are tax-free.
Property Tax: 100% P&T disabled veterans receive full exemption on principal residence. All veterans with active duty service deduct $250 annually.
New Jersey Department of Military and Veterans Affairs
New Mexico
Income Tax: Up to $30,000 of military retirement pay exempt.
Property Tax: 100% P&T disabled veterans receive full exemption. NEW: $10,000 standard exemption for all veterans (2025); proportional disabled veteran exemption (2026).
New Mexico Department of Veterans’ Services
New York
Income Tax: Retired pay and SBP payments are completely tax-free.
Property Tax: Veterans claim one of three exemptions (Alternative, Cold War, or Eligible Funds) plus disability bonuses. Amounts vary by municipality.
New York Division of Veterans’ Services
North Carolina
Income Tax: Military retirement and SBP payments are completely tax-free.
Property Tax: 100% P&T disabled veterans (or surviving spouses receiving DIC) exempt first $45,000 of assessed home value. Also qualify for $2,000 annual mortgage tax credit.
North Carolina Department of Military and Veterans Affairs
North Dakota
Income Tax: Active duty, reservist, retired pay, and SBP payments are tax-free for residents.
Property Tax: 50%+ VA disabled veterans deduct property taxes based on disability percentage.
Motor Vehicle: 100% disabled veterans exempt from tax on two vehicles.
North Dakota Department of Veterans Affairs
Ohio
Income Tax: Retirement pay and SBP payments are completely tax-free.
Property Tax: 100% service-connected disabled veterans claim homestead exemption (varies by location).
Ohio Department of Veterans Services
Oklahoma
Income Tax: All military pay and retirement pay completely tax-free.
Property Tax: 100% disabled veterans receive full exemption on homestead.
Sales Tax: 100% disabled veterans avoid state sales tax (registration required).
Oklahoma Department of Veterans Affairs
Oregon
Income Tax: Pre-October 1991 service retirement is exempt; post-1991 is taxable.
Property Tax: 40%+ disabled veterans exempt $26,303 (basic) or $31,565 (service-connected) of assessed value; increases 3% annually.
Oregon Department of Veterans’ Affairs
Pennsylvania
Income Tax: Military retirement pay and SBP payments are completely tax-free.
Property Tax: 100% VA wartime disabled veterans receive full exemption if income is below $114,637 (2025 limit).
Pennsylvania Department of Military and Veterans Affairs
Rhode Island
Income Tax: Military retirement pay is completely tax-free.
Property Tax: Veterans claim one of seven exemptions based on status (regular, total disability, specially adapted housing). Amounts vary by category and location.
Rhode Island Office of Veterans Services
South Carolina
Income Tax: Military retirement pay, VA pensions/compensation, combat pay, and Reserve/Guard inactive duty pay are all tax-free.
Property Tax: Totally disabled veterans exempt from property tax on primary residence (up to 5 acres) and two vehicles.
South Carolina Department of Veterans’ Affairs
South Dakota
Income Tax: No state income tax.
Property Tax: Permanently disabled or paraplegic veterans (and surviving spouses) exempt all or up to $200,000 of home, garage, and one-acre lot.
South Dakota Department of Veterans Affairs
Tennessee
Income Tax: No income tax (Hall Tax eliminated in 2021).
Property Tax: Certain 100% disabled veterans and surviving spouses claim property tax relief on part of home’s value.
Motor Vehicle: 100% disabled veterans and POWs avoid privilege tax.
Tennessee Department of Veterans Services
Texas
Income Tax: No state income tax.
Property Tax: 100% disabled veterans receive full exemption on residence homestead. Qualified new veteran-owned businesses skip franchise tax for five years.
Utah
Income Tax: Military retirees exclude retirement pay from state taxes. Surviving spouses/children claim 4.55% credit on survivor benefits.
Property Tax: 10%+ disabled veterans abate up to $505,548 of home’s taxable value, scaled by disability rating.
Utah Department of Veterans and Military Affairs
Vermont
Income Tax: Full exemption for military retirement income if AGI is $125,000 or less; partial exemption for AGI $125,000-$175,000 (NEW 2025).
Property Tax: 50%+ service-connected disabled veterans (or surviving spouses with Improved Pension) may reduce primary home’s appraised value by $10,000-$40,000.
Vermont Office of Veterans Affairs
Virginia
Income Tax: Retirees subtract up to $40,000 (2025 and beyond) of retirement or survivor benefits.
Property Tax: 100% P&T disabled veterans receive full exemption. Surviving spouses of those who died in the line of duty also qualify (expanded 2025).
Virginia Department of Veterans Services
Washington
Income Tax: No state income tax.
Property Tax: 80%+ service-connected disabled veterans may qualify for income-based exemptions or deferrals.
Sales Tax: Disabled veterans with VA adaptive housing grants claim $2,500 refund on state sales/use tax.
Washington Department of Veterans Affairs
West Virginia
Income Tax: Retired pay and SBP payments are completely tax-free.
Property Tax: 90-100% VA disabled veterans claim real property tax credit on primary residence. 100% P&T may be exempt from certain taxes.
West Virginia Department of Veterans Assistance
Wisconsin
Income Tax: U.S. military retirement payments (including SBP and RSFPP) are completely tax-free.
Property Tax: 100% service-connected disabled veterans and unremarried surviving spouses receive refundable tax credit covering 100% of property taxes on primary residence (up to one acre).
Wisconsin Department of Veterans Affairs
Wyoming
Income Tax: No state income tax.
Property Tax: Combat veterans (or surviving spouses) who have been Wyoming residents for 3+ years may exempt $6,000 in assessed value, applicable to primary residence or vehicle registration tax.
How to Apply for Veteran Tax Exemptions
Applying for tax exemptions varies by state and benefit type, but generally follows these steps:
For Property Tax Exemptions
- Gather Documentation: You’ll typically need your DD-214 (discharge papers), VA disability rating letter showing your service-connected disability percentage, proof of residency, and property ownership documents.
- Contact Your County Assessor: Property tax exemptions are administered locally, so your county assessor’s office is the primary resource. Many have online applications available.
- Meet Application Deadlines: Most states have annual deadlines for property tax exemption applications, often in early spring (January-April). Missing the deadline may delay your exemption by a full year.
- Understand Renewal Requirements: Some states require annual renewal, while others (like Michigan, starting 2025) automatically renew for P&T disabled veterans.
For Income Tax Exemptions
- Military Retirement Pay: Most exemptions are claimed when filing your state income tax return. You may need to complete a specific schedule or form identifying military retirement income.
- VA Disability Compensation: This is automatically excluded from income—you generally don’t need to report it or take any special action.
- Active Duty Pay: If stationed outside your state of legal residence, you may be exempt from that state’s income tax. Verify requirements with your finance office.
Helpful Resources
- VA Disability Compensation – Apply for or check your disability rating
- Request Military Records – Obtain your DD-214 or other service documents
- IRS Veterans Tax Information – Federal tax resources for veterans
Frequently Asked Questions
No. VA disability compensation is completely tax-free at both federal and state levels in all 50 states. You do not need to report these payments as income on your tax returns.
Not necessarily. While full exemptions typically require a 100% permanent and total (P&T) rating, many states offer partial exemptions for veterans with lower disability ratings. Some states, like Florida and Utah, provide benefits starting at just 10% disability.
A 100% disability rating means your combined service-connected conditions equal 100% under VA math. Permanent and Total (P&T) status means the VA has determined your conditions are not expected to improve. Many property tax exemptions require P&T status, not just a 100% rating. You can find your P&T status on your VA benefits summary letter.
In most states, yes. Veterans rated at 100% compensation due to individual unemployability typically qualify for the same benefits as those with a schedular 100% rating. However, specific requirements vary by state, so verify with your local tax authority.
Yes, in most states. Surviving spouses who remain unmarried and continue to occupy the property as their primary residence typically maintain eligibility for the exemption. Some states require the spouse to have been married to the veteran at the time of death.
It depends on your state. Some states require annual renewal applications, while others automatically renew once you’re approved. Several states, including Michigan (as of 2025), have eliminated renewal requirements for veterans with permanent and total disability ratings.
You’ll need to apply for exemptions in your new state of residence, as benefits don’t transfer between states. Research the requirements in your new state before moving, as some states have residency duration requirements before you become eligible.
Yes. Active duty pay may be exempt from state income tax if you’re stationed outside your state of legal residence. Additionally, the Servicemembers Civil Relief Act (SCRA) provides protections regarding state taxes and residency. Contact your installation’s legal assistance office for guidance on your specific situation.
This article is provided by Military.net, an independent educational resource. We are not affiliated with the Department of Defense, VA, or any government agency. Tax laws change frequently, and exemption amounts are often adjusted annually. For official benefit information and current exemption amounts, please visit your state’s Department of Veterans Affairs or contact your local tax assessor’s office. This information is for educational purposes only and does not constitute tax advice. Consult a qualified tax professional for advice specific to your situation.
